Samsung Passes Nokia in Cell Phones, Apple Tops in Smartphones

By Jim Tanous

Apr 27th, 2012 4:10 PM EDT

In an interesting turn of events for the global mobile phone industry, Samsung overtook Nokia in the first quarter to become the world’s largest supplier of cellphones for the first time, research firm IHS iSuppli reported Thursday. The South Korean electronics company shipped 92 million phones in the first quarter, beating Nokia’s 83 million shipments and surpassing the longtime market leader.

Chart by The Mac Observer from IHS data.

Apple, which only sells smartphones, placed third in overall phone sales with 35 million units on the quarter, while LG and struggling RIM rounded out the top five with 14 and 11 million units, respectively.

All companies saw a decrease in shipments from the prior quarter, with Samsung down 13 percent and Apple down 5 percent. It was Nokia’s large 27 percent decrease that allowed Samsung to overtake the Finnish handset giant, the first company to do so since 1998.

“With cellphones now accounting for more than 40 percent of Samsung’s overall revenue, it’s clear that the company’s continued investments in smartphone hardware and software R&D are paying off,” Wayne Lam, senior analyst for IHS, said in a statement. “The company is not only cashing in on the market’s shift to smartphones, but is also succeeding in other cellphone product categories, allowing it to capture the overall market lead,” Mr. Lam explained.

In the world of smartphones, Apple held on to its number one position, with 35 million units compared to rival Samsung’s 32 million units. Nokia, RIM, and LG again filled in the top five spots with 12, 11, and 4 million units on the quarter, respectively.

“Samsung’s surpassing of Nokia for cellphone market leadership represents not only a changing of the guard among handset brands but also a fundamental shift in the structure of the wireless market,” said Ian Fogg, senior principal analyst for IHS. “Cellphone market growth is now being generated exclusively by the smartphone segment, and not by the feature phones…that had fueled the industry’s expansion over the previous decade. Samsung has successfully ridden the wave of smartphone adoption to attain market leadership. Meanwhile, Nokia is in the midst of transitioning its smartphone strategy, resulting in declining shipments for the company.”

Underlining Mr. Fogg’s assertion is the fact that smartphones accounted for 34 percent of Samsung’s handset shipments in the first quarter, while only representing 14 percent of Nokia’s shipments.

Samsung’s choice to offer both Android- and Windows Phone-based smartphones has also helped the company stay diversified as the market changes quarter-to-quarter. Nokia, meanwhile, has “placed all its smartphone eggs into one basket: Windows Phone,” a move that ties the company to Windows Phone’s uncertain future.

Unless Nokia can turn its numbers around, going forward the industry expects a fierce battle between Samsung and Apple, as other smartphone manufacturers struggle. Samsung’s newest phone, the Galaxy S III, will launch in May while the next iPhone is expected sometime this fall.